Evolving Excellence

When Committees Oversee Standard Work

Standard work, a core component of lean, creates consistency of process and outcome.  Developing standard work based on data and analysis is critical, as opposed to simply documenting what is currently done.  But what happens if the analysis and data is there, but "higher authorities" effectively over-rule or discount the analysis?  An intriguing article in the WSJ earlier this week looks at one possibility from the health care arena.

The first three or four hours after a stroke are the most crucial. For most stroke patients, receiving a clot-dissolving drug shortly after arriving at a hospital can reduce the effects of stroke and limit permanent disabilities. But for some patients, with a certain type of stroke, such a drug can actually increase bleeding in the brain and boost the risk of death. Stroke experts say the best way to tell which patients should get the drug is by having a CT scan of their heads read within 45 minutes of their landing in the emergency room.

Stroke doctors like to say that "time is brain," meaning the faster a stroke is treated, the more likely treatment will lead to complete recovery or at most mild disability. In the most common type of stroke, in which a clot blocks blood flow to the brain, studies show that quick administration of the drug tPA, or tissue plasminogen activator, can improve outcomes.

But because tPA can cause bleeding, it's precisely the wrong treatment for strokes caused by a brain hemorrhage. Treatment for hemorrhagic-stroke patients aims to relieve pressure on the brain, including with surgery or medication. The CT image is pivotal in determining which course of treatment is called for.

Sounds pretty obvious.  CT scans are quick and easy, available in every reputable clinic, and relatively inexpensive compared to the potential consequences.  At least you'd think so...

But a rule that would call for a scan within 45 minutes was rejected last fall by a quasi-governmental group that sets medical guidelines used by Medicare to evaluate and reimburse U.S. hospitals. The group, known as the National Quality Forum, said the vague wording of the rule raised too many questions.

So a good policy, one that can save lives, one that is pretty obvious, gets killed due to "vague wording"... in itself vague.

Stroke neurologists say the forum's rejection of the 45-minute CT-scan rule threatens to compromise stroke care nationwide, possibly resulting in more deaths and disabilities among stroke patients. Hospitals that receive Medicare funding will have to begin publicly reporting as early as next year how well they comply with other stroke-treatment guidelines, but need make no mention of whether they perform CT scans.

Stephen M. Sergay, president of the American Academy of Neurology, wrote to Ms. Corrigan last summer saying the committee "lacks the appropriate qualified personnel to evaluate such a critical issue."

I won't dive into it, but to most of us it's obvious: welcome to the future of bureaucrat-run health care.

Congrats to Mark Graban - Lean Hospitals

A hearty congratulations to Mark Graban of the Lean Blog for winning a Shingo Prize for his book Lean Hospitals - Improving Quality, Patient Safety, and Employee Satisfaction!  In the book Mark shows that applying lean to healthcare can reduce costs... a third alternative to the traditional "more cost or less care" debate.

Coincidentally an op-ed weighed in on this debate yesterday.

Praise Mitt Romney. Three years ago, the former Massachusetts Governor had the inadvertent good sense to create the "universal" health-care program that the White House and Congress now want to inflict on the entire country. It is proving to be instructive, as Mr. Romney's foresight previews what President Obama, Max Baucus, Ted Kennedy and Pete Stark are cooking up for everyone else.

In Massachusetts's latest crisis, Governor Deval Patrick and his Democratic colleagues are starting to move down the path that government health plans always follow when spending collides with reality -- i.e., price controls. As costs continue to rise, the inevitable results are coverage restrictions and waiting periods. It was only a matter of time.

The state's overall costs on health programs have increased by 42% (!) since 2006.

Yep, I'm really looking forward to that going nationwide.  Here we have a Republican implementing a traditionally Democrat plan.  Both screw it up, as usual.  Pushing on the balloon always ends up doing something else... but in this case it affects real people.

If health planners won't accept the prices set by the marketplace -- thus putting themselves out of work -- the only other choice is limiting care via politics, much as Canada and most of Europe do today. The Patrick panel is considering one option to "exclude coverage of services of low priority/low value." Another would "limit coverage to services that produce the highest value when considering both clinical effectiveness and cost." (Guess who would determine what is high or low value? Not patients or doctors.) Yet another is "a limitation on the total amount of money available for health care services," i.e., an overall spending cap.

But there is a third option, the option that Mark describes.  Focus internally on the 70% or so of processes that are waste.  Focus on patient outcomes, improving the process, employee satisfaction, and obviously the customer.  Follow the lead of healthcare organizations like Thedacare that create radical improvement and stunning results... at a much lower cost.

Calvin should be the Auto Czar

[View full comic strip here] 

They say things are funniest when there’s a hint of truth in them. Calvin’s lemonade stand comically exposes the flawed thinking that governs most businesses. You can see it in the American auto industry. Flawed business models and poor economic decisions will lead to failure…or worse yet, subsidies.

This is exactly why lean principles are in need now more than ever. Sure, becoming lean cannot stop an economic downturn. But which position would you rather be in to weather the storm – Toyota ’s or one of the Big Three’s?

Businesses face this same issue every day of every year. The only difference currently, is that more than usual face it during a slower, more difficult time. Economic downturns exacerbate problems that firms normally live with instead of resolving. When these problems aren't resolved, or at least improved upon, they can be a death nail when business slows down. A bailout, loan, or money from a rich uncle only delays the inevitable. In the end better economic decisions and actions are required.

Lean principles move a firm to make better economic decisions; and, therefore, create a more stable and sustainable organization which can prosper when times are good, and ride the storm out when times are not so good. My guess is that Calvin’s mom will not give him a bailout! Hat’s off to her for teaching good economic principles.

What Won't You Do in 2009?

As the 2009 arrives, many of you will be focused on resolutions of what you'll do in the new year.  Get a body like Obama, a love life like Gere, success, fame, fortune, wisdom... most will undoubtedly be broken by the end of January.  Matthew May over at Elegant Solutions reminds us there's a different path, a different perspective.  One that is more "lean" by focusing on removing instead of adding and improving the fundamental value.

What WON'T you do in the new year?

Jim Collins was Matthew's inspiration almost five years ago, with this article in USA Today.

Each time the New Year rolls around and I sit down to do my annual resolutions, I reflect back to a lesson taught me by a remarkable teacher. In my mid-20s, I took a course on creativity and innovation from Rochelle Myers and Michael Ray at the Stanford Graduate School of Business, and I kept in touch with them after I graduated.

Rochelle's challenge forced me to see that I'd been plenty energetic, but on the wrong things. Indeed, I was on entirely the wrong path.

Rochelle spoke to me repeatedly about the idea of "making your life a creative work of art." A great piece of art is composed not just of what is in the final piece, but equally important, what is not. It is the discipline to discard what does not fit -- to cut out what might have already cost days or even years of effort -- that distinguishes the truly exceptional artist and marks the ideal piece of work, be it a symphony, a novel, a painting, a company or, most important of all, a life.

Matthew adds the following.

It occurred to me as I read the essay that each of the hordes of Toyota ideas had behind it the “stop-doing” philosophy. I suddenly realized that I had been looking at the problem in the wrong way. As is natural and intuitive, I had been looking at what to do, rather than what to not do. But as soon as I shifted my perspective, the vaunted Toyota Production System became for me a study of what wasn’t there, and of how and what to stop doing. The Lexus line of cars, which had by then become America’s leading luxury nameplate, was suddenly a shining example of eliminating anything that lacked passion and perfection. The singular thought that what isn’t there can often be as or more powerful than what is presented me with a completely different view of the world. In fact, it presented an altogether unique reality—and a life-changing one, at that.

So what doesn't fit in your life?  What is sucking up energy that could be better used elsewhere?  What is taking away from the efficient, calm elegance that your life could be?

Time for a Vaccine DOE?

My young niece suffers from severe mental challenges resulting from Infantile Spasm Syndrome, which creates an outcome somewhat similar to autism.  The situation, coincidentally or not, began right after a certain series of childhood vaccines.  For years there have been purported links between autism and vaccines, and several studies discounting those links.  And of course there's the argument that the benefits to the majority of the population outweigh the potentially devastating consequences to a few.  Not really much comfort for those few.  I can't go into it in detail, however the government has agreed that there could have been a link between vaccines and my niece's condition. 

My sister in-law recently sent me a link to a website with some startling information.

The growth in the number of vaccines given to our children in the last 20 years is rarely discussed in the media, despite a stunning chart like this one that shows a 260% increase in vaccines administered (were millions of children dying from deadly diseases 25 years ago? No, they weren’t.)

Take a look at that chart.  Where did all those vaccines come from? 

Parents should know that vaccines are never tested for their "combination risk", despite the fact that children may get as many as 6 vaccines in a single visit to the doctor. And, when it comes to vaccines, how can it be possible that one size fits all? What may present as no risks for one child may present enormous risks for another.

And that's what's scary to me.  We know about drug interactions as an adult, and most adult drugs have been tested with many others.  We also know that as we age drug management becomes increasingly difficult due to those potential interactions. 

Lean Banking

Lean seems to be taking root just about everywhere... manufacturing, government, healthcare, education... you name it.  Now we learn about lean manufacturing being applied to banking.

Many corporate banks and other financial institutions routinely apply the management principles of lean manufacturing to help standardize straightforward business procedures, such as the straight-through processing of securities transactions. The advantages include speedier operations, lower costs, better products, and an improved customer experience.

Of course every industry is different, however the core concepts and methods of lean remain constant.

But many of an institution’s most valuable activities involve dozens or even hundreds of steps that may require sophisticated customization and expert judgment from numerous sources—and thus resist standardization.  This was the problem facing a specialized commercial lender that had expanded its sales force to fuel rising levels of business from several industries but couldn’t keep pace with demand for new loans. Constrained by head office limits on the number of new hires, its only alternative was to investigate ways of making its processes less complex.

Time for lean.

The bank responded on a number of different fronts:

First, it established multifunctional loan teams for the industries of its major clients. Each team had a designated leader responsible for the team’s effectiveness and business output (as measured by the success of loan decisions, team collaboration, and problem solving).

To win the buy-in of functional experts, the leader reported to a new-deal committee comprising senior executives from the functions represented on the sector teams. The committee streamlined loan processes by assigning loans to one of four standard tracks based on a combination of risk and regulatory factors (exhibit).

Value stream organization as opposed to functional silos.

The bank then kept the momentum going through a combination of clear milestones and deadlines, as well as the use of tools such as real or electronic whiteboards to identify bottlenecks and areas for improvement at the team’s regular meetings.

KPI's and visual management.  And it worked.

As a result of these actions, the time required to complete a transaction shrank by 70 percent, and productivity improved by 30 percent.

The lessons learned are the same for every industry that implements lean.

The task of choreographing the activities of the credit analysts, lawyers, product managers, technology specialists, and various other experts who support a financial institution’s complex, high-value activities can seem daunting. It needn’t be. The key is for banks and other financial institutions to focus not only on the operational manifestations of the problem (the tailored processes and ineffective handoffs that slow down turnarounds) but also on the organizational shortcomings that inhibit collaboration, accountability, and a sense of common purpose among teams.

By adopting this integrated approach, senior managers in a variety of financial settings—including corporate lending, investment banking, and project finance—might extend the benefits of lean production to their businesses. The results, on top of improved productivity, will probably include happier employees and more satisfied customers.

Welcome to the lean world!

 

The Waste of Unnecessary Complexity

We're always thrilled when a simple, manual solution to a problem can surpass the performance of expensive technology.  Regular readers know that we often rant on the downsides of complex manufacturing scheduling systems when a simple whiteboard will often suffice.  We saw a similar case of simple elegance last month during the Olympics in Beijing.

High-tech televisual bells and whistles have carried couch-based Olympic watching way beyond the mere reality of being here. Thousands of cameras are catching the action in China -- every one of them high-definition. Yet for a feat of engineering magic that dazzles as it baffles, nothing beats the DiveCam.

Yes, producers wanted the ability to watch divers as they plummeted to the water... from the level of the height of the diver.  Ingenious technology was tried, but then someone remembered something from his high school physics class.

"When you stand up there," he [David Neal, NBC Olympics Productions Supervisor] says, "it makes you marvel at what these athletes will do. We were thinking: What must it be like to plummet from that height? How can we capture the sensation?"

At which point the apple landed on Mr. Neal's head: "Why not let gravity do the work?" On the requisite cocktail napkin, and in keeping with Sir Isaac's universal laws, he sketched a cartoonish doohickey.

The idea was born, and soon became reality.

Well, there's a rope. There's a pulley. And the rope and the pulley work a contraption made out of a pipe. The whole gizmo is based on the brilliant insight that objects fall at the same rate regardless of mass. A Tuscan by the name of Galileo came up with it about 400 years ago; if he were alive, he'd call it cutting edge. And there's the beauty of it: It's sophisticated, yes, but only because it's simple.

Sophisticated... because it's simple.  Simple elegance.  Applying this to the waste-conscious lean world, I could coin what is probably the tenth or eleventh waste by now: the waste of unnecessary complexity.  As applicable to diving cameras as to unnecessarily complex supply chains.

Draining the... err... Stench

Lean people have a favorite saying of "drain the swamp," typically meaning reducing inventory to expose problems.  When raw, in-process, and finished goods inventories are reduced, previously-masked production problems such as poor quality, rework, and other wastes become much more evident.  It can be a painful process, but it leads to fundamental improvement.

Apparently the same scenario applies elsewhere.

Now that the cigarette smoke has cleared, thanks to the ban that went into effect in January, bar goers are sniffing some bad odors.  "When it's emptier, [a bar] smells like stale beer, spilled alcohol, frat house," said Brittany Allan, 21, a student living in Gold Coast. While taking a break from work downtown, Rahim Slaise, 32, recalled smelling scents of "overbearing cologne, a musk and body odor" at clubs recently.

Ah, yes.  Now that the foul smell of cigarette smoke is gone, the other odors become noticeably.  To think we were inhaling that calcophony of smells all along.  Of course a scientific study was needed to truly analyze this phenomenom, and who better to sponsor it than a deodorant company?

Using odor-gauging equipment called a Nasal Ranger field olfactometer, smell expert Dr. Alan Hirsch identified 46 different odors at a Gold Coast bar in May for a study sponsored by Axe, maker of body sprays. The top odor contributors were a musty/earthy/moldy smell that tends to come from wood, a urine-like scent, a sour/acid/vinegar odor that could come from residual alcohol, and of course the odors of sweat and beer.

It's bad, my friends.  Really bad.

"The bar is a three times more intense smell than the McCormick Place men's room, or 15 times more or 16 times more intense odor than a coffee shop, and was almost twice as smelly as an animal shelter," said Hirsch, founder of Chicago's Smell and Taste Treatment and Research Foundation, citing odor intensity levels.

The good news is that now that the swamp has been drained, the underlying problems are being addressed.

To get rid of bad odors, bars should maximize ventilation or even inject a scent into the air, said Hirsch, the smell expert. "You could place an aroma at a bar that people like. They will perceive the environment to be more friendly, be happy at the bar and meet more people at the bar," he said. At least one local bar is doing just that.

The Crimson Lounge at the Hotel Sax downtown developed a signature scent even before the smoking ban called suha, a fusion of pomegranate, cinnamon, nutmeg, patchouli, sandalwood, cypress, cedar and vanilla. Dispensed through a programmed and timed device, the scent was created to evoke the dark yet cozy lounge feel, said Adam Kaplan, hotel marketing director. "

Hmmm... as someone who meets the boys for "Guys Night" once a week (the most allowed by our wives...) at a somewhat seedly local establishment, I may learn to miss some of the old aromas.  Somehow the smell of pomegranate and nutmeg doesn't seem to go with Monday Night Football...

Get Small. Get Lean.

An article in last Sunday's NYTimes addressed the value of corporations staying small. In contrast to the early days of the internet when "get big, fast" was the mantra for all firms (especially internet startups), there's a growing recognition that there are real benefits to thinking small.

Although the article doesn't address Lean, the message is familiar to any student of lean processes. For example,

Decentralizing the hierarchy opens the door to creativity, giving workers the leeway they need to make significant decisions without first jumping through executive management hoops. “The idea,” says [Philip Rosedale, founder and chairman of Linden Lab, the company that built Second Life], “is to enable a creative environment where there’s a good degree of experimentation.”

And experimentation, after all, is what Toyota is all about: running controlled experiments in an effort to continually improve the production process.

The article goes on to argue that one of the major advantages of thinking small is the increased opportunity for small group collaboration. Although the author doesn't recognize the key features of a value stream management approach, one of the companies she profiles clearly does:

At Avocent, an information technology management company based in Huntsville, Ala., customers, product developers and testers had gotten to the point that they rarely interacted. Each group felt that it lost control of a project too early in its progress. So, in March 2007, the company revamped development so that members of all three groups would work on the same team, following a project from start to finish and making changes as needed. With customers, programmers and testers working virtually side by side, Avocent tripled production without adding workers.

The focus on the customer hasn't just increased production, either. It's reduced the waste of rework:

By making sure products in development meet customer needs each step of the way, Avocent has been able to avoid spending weeks correcting errors in the final product, says Ben Grimes, chief technology officer.

I don't think that a company has to be small to orient itself around the value stream and focus on the customer. There are plenty of large customers that manage the same trick. But if thinking small is a more palatable way for companies to give up command and control management techniques in favor of a lean respect for people, so be it. As Seth Godin says, "small is the new big."

Lean Hospitals - Q&A with Mark Graban

Fellow lean blogger Mark Graban is the author of the just-published Lean Hospitals.  The following is a brief Q&A with him on lean in healthcare, although "brief" may be a bit of a misnomer.  Mark is obviously passionate about the subject, and therefore can be almost as verbose as I am.  In fact, in several places I'll link to the full Q&A on Superfactory for the rest of the discussion.

1.  From a lean perspective, how are hospitals and manufacturing the same and different?

There are many things that are similar about factories and hospitals. They both involve, at a real basic level, people doing work and people who manage the people doing their work. There is a lot of waste in hospital processes (the standard “8 Types of Waste” actually works pretty well in a hospital) and often times there isn’t “a process” to speak of. What you often have is individuals or departments (or even sub-department silos) each working hard independently while the handoffs across the “value stream” (or “patient pathway,” as many in healthcare have traditionally referred to it) are botched because nobody owns the overall process. Most delays and waiting time in hospitals is probably caused by poorly planned handoffs. So the value stream view of the world helps, bringing people from different areas together to actually map out the entire process -- it’s very eye-opening to people! They learn to identify waste and to, more importantly, drive improvement in their own workplace.

Read more...

2. What are examples of lean improvements in hospitals?

There are many examples of department, value stream, and hospital-wide improvements as a result of Lean. Lean improvements can benefit all stakeholders -- the patients, the staff (employees and contracted physicians), and the hospital itself.

First off, in the patient safety and quality area, Allegheny Hospital in Pittsburgh used Lean methods to reduce patient deaths related to central-line-associated blood stream infections by 95%. This is really powerful stuff. Focusing the Lean methods of standardized work and waste elimination can really have a life-saving impact. You see similar results in the use of the “checklists” methodology, leading to reductions in infections, bed sores, and other preventable “adverse events” that occur to patients far too frequently. These improvements obviously help patients, they help staff (who want a method to help prevent patient harm and unneeded stress), and the hospital’s costs.

Read more...

3.  What is the potential for lean in hospitals?  Can it change the healthcare policy dynamic?

Much of the public policy or political discussion of healthcare has been focused on “how do we pay for healthcare?” Since the cost of providing healthcare in the United States increases roughly 10% per year (and this doesn’t mean the cost of the providing the same care increases that much), there are pressures to control these increases. Unfortunately, when insurers and payers (public or private) focus on “cutting costs,” they are really just “cutting prices,” the way “non-Lean” companies pressure suppliers to unilaterally cut prices. The Toyota model is one of working with suppliers, in a long-term partnership, to reduce true costs and sharing the savings. Cutting the true costs of providing healthcare is a way for us to afford new technologies and treatments without increasing our total spending.

Read more...

4.  What hospitals (or networks, etc) have embraced lean?

I almost hesitate to name names, since so many hospitals are doing amazing things with Lean “under the radar.” I do think, though, it’s important for hospitals to promote what they’re working on to spread the word about Lean. A few of the noted and written about leaders in the U.S. include Virginia Mason Medical Center (Seattle) and ThedaCare (Wisconsin). Virginia Mason (which I’ve visited) and ThedaCare have had extremely strong leadership from the CEO level. At ThedaCare, John Toussaint is an MD and CEO, so that leadership played a major role in their Lean progress.

Read more...

5.  Although presumably manufacturers are further along on the lean curve than hospitals, I'm betting that there are still things that lean manufacturers could learn from lean hospitals.  Anything come to mind?

I think many hospitals are doing a great job of remembering BOTH pillars of the Toyota Production System -- continuous improvement and “respect for humanity.” Many hospitals are taking a very people-centered view of Lean, making sure that Lean benefits all stakeholders, including patients, employees, and physicians. I break out physicians into a separate group because it’s a different (and more complicated) dynamic than “employee/manager.”

I encourage my friends in manufacturing to tour a hospital that is working on Lean because it will really force them to think about the basics of Lean. I think that will spur creativity that will help them back in their own process. I always cringe when I see a question like, “I am looking for a cement company that has implemented Lean” because that means someone is looking for shortcuts and to copy. If hospitals (especially the early ones who had nobody to copy) can figure it out, so can you, in your own industry.

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6.  What is the best way for a hospital (or medical group, or clinic?) to begin the lean journey?

I think hospitals need to learn the lessons from failed Lean efforts in manufacturing and other industries. You have to “start from need” as Ohno said. What are you trying to improve and why? One failure mode is the approach of using a tool, or a set of Lean tools, without tying it to the mission of the organization and existing measures. Lean can improve safety, quality, waiting times, costs, employee satisfaction -- hospitals are typically already measuring these things, Lean needs to support that.

Secondly, you can’t rely on isolated “kaizen events” to make you Lean. Kaizen events (or “rapid improvement events” or “rapid process improvement workshops”) are as appealing to healthcare leaders as they are to factory leaders. Just one week and your process will be “Lean” is often the appeal. Well, changes happen, but in the rush, tools might be implemented and improvements might be made, but without changing the underlying management system. Even Virginia Mason Medical Center, seen as a leader in the use of Lean, admits in their own publication that they had significant backsliding in 60% of their kaizen events. Many hospitals are being successful by taking a more systemic approach to Lean improvements -- training employees and managers, planning for how they are going to make Lean a management system and a part of the culture rather than a one-time event.

Read more...

Again, the full Q&A is here, and you can learn more about his Lean Hospitals book here.  Until Amazon catches up with shipping delays, it can be ordered for immediate ship here.  Thanks to Mark for the very detailed answers to my questions!